Washoe County Commissioners recommend budget freeze

At its regularly scheduled meeting, the Washoe County Board of Commissioners approved in a four to one vote (Jung dissenting) expanding a hiring freeze to help close the county’s remaining $6.8 million dollar budget gap for the 2011-2012 budget year. The freeze would be subject to exceptions as approved by the county manager or the commissioners.

The county’s fiscal year 2011-12 budget included $11.6 million in labor cost reductions. Voluntary labor concessions by some labor groups to date totaled $4.8 million, bringing the remaining needed reduction to $6.8 million. The county’s original budget shortfall was $33.5 million, and through the following cuts it has been reduced to $6.8 million:

Original shortfall (in millions)

$33.50

Insurance Negotiating Committee health plan reductions

2.20

Net budget shortfall

31.30

Departmental operating budget reductions

5.00

Alternative service delivery reductions from fundamental review

5.00

Use of reserves to finance long-term changes in service delivery

9.70

Net amount needed from wage and benefit reductions

11.60

Voluntary concessions to date

4.80

Remaining fiscal year 11/12 budget shortfall

$6.80

During a presentation for the commissioners, Finance Director Sheri Mendez explained that this option takes into account that departments currently have 140 funded, vacant positions. “Holding these positions vacant could result in up to $2 million in salary savings between now and the end of the fiscal year. These savings would be in addition to vacancy savings realized since July 1, 2011. Expanding the existing vacancy freeze will allow some management of the budget gap pending resolution of employee negotiations,” Mendez said.

The three additional options presented to meet the current budget deficit included additional cuts to department operating budgets, further use of limited reserves and implementation of the 1 percent Governmental Service Tax on the depreciated value of motor vehicles.

Mendez explained that departmental operating budget reductions is problematic in the short term as departments are currently implementing their 10 percent reduction plans approved by the board on September 27, 2011, on top of steep cuts taken since 2007; these operating reductions have already included lay-offs in some cases. With the reset of wages on June 30 of this year, Mendez projected that approximately $18 million in further reductions would have to be made effective July 1, 2012, while awaiting the resolution of labor agreements.

Departmental budgets have been reduced by more than 50 percent in some cases, such as Parks and Libraries, and additional cuts on top of those already taken will have critical impacts on service delivery to citizens. In comments to the County Commission, Sheriff Mike Haley reported that the loss of 141 positions in the past four years has left his office with a ratio of patrol officers to population that is below 1 per thousand population, which is far below national and western averages.

County Manager Katy Simon says the budget freeze will give the county some needed flexibility. “We realize there have been significant salary savings already and we also recognize some positions have to be filled. We can’t meet mandates without filling some of those job vacancies. However we need to move forward and plan through the end of the fiscal year, and this freeze will give us the flexibility to do that.”

Commissioner Bonnie Weber recognized the effort being put into the entire budget process county-wide. “I want to commend our manager and our staff for looking at everything in the budget, along with the WCEA and all of our employees. This is not easy as we all live in this community and see our neighbors who are losing job and homes. We have to look at everything and we need to stay committed. We are asking as a team to do this together.”

The commissioners voted 4 to 1 to approve the hiring freeze with Jung voting against it, citing her preference for using county reserves rather than further impacts on employees and service levels to help balance the budget. The commissioners will receive an update on the 2012-13 budget planning process during the next regularly scheduled Board of County Commissioners meeting on Feb. 14.

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